The Shire said it entered into an agreement with the Water Corporation about 15 years ago to re-use treated wastewater as irrigation on Forrest Oval, in York, and nearby open spaces.
The water was pumped from a Water Corporation-owned treatment plant on Northam Cranbrook Road into the Town Dam, on the corner of Trews and Ulster roads, then discharged onto the oval.
But some time in 2012 the shire-owned Town Dam became salty and it later contributed to a major deterioration of the turf at Forrest Oval.
The issue first came to light in May last year and the Shire switched to using mains water for irrigation, at a cost of about $30,000 a year.
It stopped receiving treated wastewater from the Town Dam and has been in discussions with the Water Corporation about the future of the dam since February this year.
A consultant was hired by the Shire to investigate the condition of the dam and it was noted that if no action was taken, the dam could overflow and pose a public health risk, as well as a pollution threat to the Avon River.
The Water Corporation has notified the Department of Health and the Department of Environmental Regulation about the potential risk of the wastewater and signs have been posted around the dam warning residents not to come into contact with the water.
Shire of York President Matthew Reid said there were no ‘direct health risks’ from dam water.
‘There is a risk that we could be releasing nutrients into the Avon River,’ Mr Reid said.
He said residents in properties surrounding the dam had not been informed of the situation.
One option the council considered before deferring a decision on the dam last Monday was an emergency overflow coffer dam next to the Town Dam. The estimated cost of that project would be about $40,000.
The Town Dam is used for stormwater management and also plays a role in flood mitigation because it is on a significant watercourse.
It is understood the salinity in the dam came from salt encroachment in the upstream catchment area.